Novartis General Counsel to Step Down After Cohen Payments

Novartis AG’s legal counsel became the first executive to take the fall for a controversial payment he helped arrange to Donald Trump’s personal lawyer, as the Swiss drugmaker tries to contain the furor from the revelation last week.

Felix Ehrat will retire after seven years as Novartis’s top lawyer and be replaced by Shannon Thyme Klinger, currently the chief ethics, risk and compliance officer, the Basel, Switzerland-based company said Wednesday in a statement.

Novartis Chief Executive Officer Vas Narasimhan has been battling controversy over the $1.2 million contract, which drew the drugmaker into Special Counsel Robert Mueller’s probe of suspected Russian meddling in the U.S. presidential election. Narasimhan is meeting investors at an event Wednesday in Basel. He conducted a conference call Monday for 5,000 managers in which he said the company needs to rethink its approach to the use of consultants and lobbying firms, according to a person familiar with the situation.

“Although the contract was legally in order, it was an error,” Ehrat said in the statement. “As a co-signatory with our former CEO, I take personal responsibility to bring the public debate on this matter to an end.”

The company has said it quickly determined that Cohen’s business would be unable to provide the services it anticipated and decided not to engage further, but was contractually bound to keep making monthly payments of $100,000. Novartis has said that Narasimhan had no involvement.

In an interview with Bloomberg, former CEO Joe Jimenez said Cohen told him that he had left Trump’s organization and had stopped working for the president before pitching for business with Novartis.

“Michael Cohen was somebody who was introduced to us, and he was unknown to us, but he was said to be somebody who could help,” Jimenez said. “After my team met with him individually, it was clear that he oversold his abilities.”